Reliant, Dynegy lead NYSE trading

LisaSanders

DALLAS (CBS.MW) - Trading in Reliant Resources and Dynegy led the New York Stock Exchange's most actives list at Tuesday's close after the former announced second-quarter results, a cost-cutting plan and a new CEO and the latter benefited from two upgrades.

Reliant
RRI, -6.35%
shares plunged more than 22 percent to close at $3.88 on volume of 29.1 million. Dynegy
DYN, +1.76%
rose 6.7 percent to close at $3.17 after 17.8 million shares changed hands.

Reliant Resources reported a second-quarter loss from continuing operations of $28 million, or 9 cents per share, down from its year-ago equivalent earnings of $122 million, or 42 cents per share. Six analysts polled by Thomson First Call were looking for a profit of 19 cents per share in the June period. Reliant also said it has finalized a plan to cut yearly operating expenses by $140 million.

The Houston-based company named Joel Staff chairman and CEO. Staff has served in both positions on an interim basis since mid-April when Steve Letbetter resigned. See full story.

Late Monday, Dynegy said it closed $1.625 billion in refinancing transactions, including the offering of $1.45 billion in senior secured notes and $175 million in convertible debt. The company also said it exchanged $1.5 billion in preferred stock held previously by a subsidiary of ChevronTexaco
CVX, +0.81%
and has received $40 million from ChevronTexaco for the return of certain pre-payment amounts. See full story.

Elsewhere, Williams Cos.
WMB, +0.23%
reported second-quarter net income from continuing operations of $118 million, or 18 cents a share (46 cents a share including discontinued operations), vs. a loss of $331.8 million, or 65 cents a share in the year-earlier period. Analysts surveyed by Reuters Research had been expecting a loss of 3 cents a share, on average. Shares rose 6.2 percent to close at $8.35. See full story.

Shares of CMS Energy
CMS, -0.27%
slipped 1.1 percent to close at $6.39 after reporting a second-quarter net loss of $45 million, or 31 cents a share, vs. a loss of 55 cents a share in the same period a year ago. Operating revenue fell 46 percent to $1.15 billion. The company revised its forecast for full-year earnings-per-share to a loss of $1 a share from "roughly breakeven," due to changes in the timing of and expected proceeds from asset sales, pension expenses and increased financing costs. See full story.

In other news, Williams Energy Partners
WEGE3, -0.87%
said it would begin doing business as Magellan Midstream Partners, L.P. effective Sept. 1. The partnership's common units will begin trading under the ticker symbol "MMP" on that date on the New York Stock Exchange. Also, J.P. Morgan recommended that clients overweight Williams Energy as it upgraded the rating from "neutral."

"In an environment of rising interest rates, investors should own those MLPs (master limited partnerships) with cash distribution growth prospects that can offset further rises in interest rates," wrote analyst Anatol Feygin. "With a clear path to distribution growth through mid-2005, we think WEG will be able to outperform its MLP peer group over the medium-term."

Feygin said Williams Energy's separation from Williams Cos. is beneficial because it lowers the partnership's cost of capital and gives it a chance to secure an investment-grade rating from one of the credit agencies.

Williams Energy's units rose 86 cents to close at $43.26.

Also, Aquila
ILA, -2.44%
reported a second-quarter loss of $80.6 million, or 41 cents a share, vs. a loss of $810 million, or $5.69 a share in the year-earlier period. The results included restructuring charges of $20.8 million and asset impairment charges of $103 million amid its ongoing plan to wind down its wholesale energy business as part of its decision to become a regulated utility. The electricity and natural gas distributor said it would continue its restructuring efforts through this year and next. Sales for the quarter fell 32 percent to $403.2 million. Shares rose 2 cents to close at $2.46.

Meanwhile, Duke Energy
DUK, +0.39%
said its subsidiary Duke Energy North America LLC has agreed to sell a 25 percent interest in its Duke Energy Vermillion facility to Wabash Valley Power Association Inc. of Indiana for $44.4 million. Duke will continue to own the remaining 75 percent of the plant. The company plans to take a pre-tax charge of $19 million to account for the sale in the third quarter. Shares rose 26 cents to close at $17.52.

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